UK Court orders Mallya’s extradition

The Westminster Magistrates’ Court in London with the sitting Judge Emma Arbuthnot, on December 10, 2018 ordered the extradition of Vijay Mallya back to India on the request made by the Government of India for being wanted under the charges of fraud and money laundering.

In 2014, United(/Union) Bank of India announced that Mallya was a “wilful defaulter” wherein SBI and Punjab National Bank followed suit leading to this huge case at the Magistrates’ Court on December 4 last year and had gone through a series of hearings beyond the initial seven days earmarked for it before verdict on December 10, 2018.

Vijay Mallya faces at least 27 cases in various courts, including 22 relating to loan default. A breakup of default amounts reported in The Indian Express in 2016 shows that the highest dues were to State Bank of India (Rs 1,600 crore).

The three main allegations against Mallya which the Westminster court held to be enough reason for the extradition orders were-

1. Conspiracy to defraud contrary to section 12 of the Criminal Justice Act 1987- Dr Mallya and other executives at KFA is said to have conspired with the Chairman Mr Agarwal and others at IDBI Bank by causing IDBI to sanction and disburse loans to KFA with the intention of not repaying the said loans as agreed and required. It was said they were able to do this by supplying the bank with false information about KFA’s profitability and by permitting the bank to rely on false information in respect of the value and availability of securities to be relied on by the bank.
    
2. False representations to make a gain for himself contrary to sections 1(2)(a) and 2 of the Fraud Act 2006- Dr Mallya is said to have dishonestly made representations to the bank which he knew were or might be untrue or misleading by supplying false information to the bank in respect of  profitability and the value and availability of securities to be relied on by the bank, intending to make a gain for himself or to cause loss to the bank. By doing so he obtained the loans which were not then spent on what they should have been spent on and the third charge is a conspiracy to launder the money obtained by KFA from IDBI.
    
3. Conspiring to money launder contrary to section 1 of the Criminal Law Act and section 327 and 334 of the Proceeds of Crime Act 2002-  That Dr Mallya between September 1, 2009, and January 24, 2017, conspired with A Ragunathan, Y Agarwal, B Batra, O Bundellu, S Srinivasan, R Sridhar and others to conceal, disguise, convert, transfer or remove criminal property, namely the (direct or indirect) proceeds of the said loans obtained dishonestly by Kingfisher Airlines from the Bank.

The court found the prima facie case to the above 3 charges and the case to be worthy of extradition orders to be allowed as per extradition offences within the meaning of section 137(3) of the Extradition Act 2003.

Vijay Mallya’s lawyers had tried to argue that, the case was media and politically motivated, which wouldn’t ensure a fair trial for him if he had been sent back to India as well as that India Judiciary and CBI could easily get influenced by media and politics which the judge did not agree upon.

Takeaway:

1. Vijay Mallya now has 14 days to file an appeal against the extradition order which will now be channeled to the United Kingdom Home Office (the British equivalent of Home Ministry) where Home Secretary, Sajid Javid, will pass an order based on the verdict of the Magistrates’ Court. It could still be possibly months before Vijay Mallya is brought back to India.
    
2. This is a big win for the banks and the Government of India, which proves to that money cannot let people have their way. It would be a feather in the cap of current government in bringing the criminal to book esp, by an extradition order.
    
3. The only person that UK has extradited to India till date after signing the India, UK Extradition Treaty in 1992 is Samirbhai Vinubhai Patel. He was wanted in one of the 2002 Gujarat riots cases. Extradition happened in October 2016.
    
4. When Mallya returns, the Enforcement Directorate(ED) will try to get him tagged as ‘fugitive economic offender’ under Fugitive Economic Offenders Act, 2018 in accordance with Section 4 of the Act in the Bombay High Court, he will be tried in Delhi court for a non-bailable warrant (NBW) as he had evaded summons in the case of Foreign Exchange Regulation Act violation, and also by Central Bureau of Investigation (CBI) court for loan default, and the country’s debt recovery tribunal has already ordered banks to begin the recovery of loans.